High Court affirms it has no jurisdiction to grant an injunction in circumstances where an employee claims to have been unfairly selected for redundancy.

Legal

In a development that will be of some relief for employers, in Kearney v Byrne Wallace, the High Court has affirmed that it does not have jurisdiction to grant an injunction in circumstances where an employee claims to have been unfairly selected for redundancy.

Background to the case

In this case, the plaintiff had been employed as an associate solicitor in a law firm from 2006 until August 2017, when he was notified of the termination of his employment on grounds of redundancy. The plaintiff, who had previously been absent on sick leave from 2013 to 2015, sought to argue that he had been unfairly selected for redundancy, “either because no genuine circumstances existed in the firm to justify his redundancy or because he was selected for redundancy on account of his absence from work due to ill health”.

The plaintiff sought to rely on evidence that the defendant was continuing to recruit solicitors to demonstrate that the actions of the defendant were “carefully contrived” and that this was a sham redundancy process. Accordingly, the plaintiff sought an injunction to restrain his dismissal and a declaration that he continues to be employed at the defendant and entitled to be provided with work.

High Court judgment in Nolan v Emo Oil Services affirmed

In finding that the plaintiff had not established a strong case that might justify the award of an injunction, Baker J. affirmed the judgment of Laffoy J. in Nolan v Emo Oil Services, in which it was held that the High Court could not supplant the Oireachtas, which had set out specific remedies for unfair dismissal and specific procedures for obtaining such remedies within the Unfair Dismissals Acts. As such a remedy arose under statute, and the plaintiff had not otherwise acquired a cause of action for breach of contract, Laffoy J. held that there was no remedy Mr Nolan could pursue in the courts.

This is because redundancy is a creation of statute, and so the assessment of any remedy that may arise as a consequence of being unfairly dismissed on grounds of redundancy is reserved to the body that has been specifically designated by redundancy legislation. Consequently, absent any freestanding cause of action for breach of contract, such a claim can only be brought before the Workplace Relations Commission and, on appeal, the Labour Court.

No freestanding cause of action for breach of contract may be fatal

In affirming Emo Oil, Baker J also distinguished the present case from other more recent decisions in Burke v Independent Newspapers Ltd and Brennan v Irish Pride Bakeries. The plaintiffs in both of those cases had been able to point to alleged deficiencies in the manner in which the purported termination was carried out – ie that their employment had not validly terminated in accordance with their contracts of employment. In Burke, the plaintiff successfully argued that the requisite corporate authority to dismiss had not been demonstrated; while in Brennan, the correct amount of contractual notice to terminate was not given. In this case, the termination provisions set out in Mr Kearney’s contract were adhered to by the defendant in notifying him of his dismissal, and so there was no freestanding cause of action for breach of contract.

Can a challenge to the fairness of a redundancy process justify High Court intervention?

As to whether or not the plaintiff could challenge the fairness of the process itself in support of a breach of contract claim, Baker J noted that the “substance of the claim has a statutory source. The common law has no separate jurisdiction to grant an injunction in aid of such a claim, in regard to which the Oireachtas has provided a different means of redress”.

It is also telling that Baker J appears to have explicitly shut the door to an argument that a plaintiff is justified in commencing proceedings in the High Court to secure equitable reliefs that are not available in the WRC – for example, a declaration that the plaintiff continues to be an employee. In referring to the underlying claims as being “essentially statutory in origin”, Baker J held that “the declaratory relief sought and the claims regarding alleged breach of fairness are ancillary to that primary relief. The requirement to establish a strong case cannot be satisfied by the ancillary reliefs and must bear on the substance of the claim.” In other words, in order for the High Court to have jurisdiction, it is for an employee to demonstrate that the substance of his/her claim falls outside the statutory structure.

Is the fairness of a redundancy process to be assessed differently than a disciplinary process?

These comments are of particular interest for employment lawyers as, on its face, there appears little reason why a distinction should be made between a dismissal on grounds of redundancy on the one hand, and a dismissal on grounds of misconduct on the other - in circumstances where remedies (and relevant limitations) for both are clearly set out in the Unfair Dismissals Acts. No such distinction exists in the United Kingdom, where employment injunctions are far less common, and are essentially restricted to cases involving a freestanding breach of contract – eg a failure to follow a contractually mandated disciplinary procedure.

However, in Ireland there is a substantial body of case law that allows for the possibility of an injunction restraining a dismissal on grounds of misconduct where fair procedures have not been applied. It appears that this distinction derives solely from a constitutional entitlement to fair procedures in circumstances of gross misconduct and/or where an employee’s reputation is at stake – ie in a disciplinary context. Having regard to the High Court decisions in Emo Oil, and this most recent decision of Baker J., it is evident that such an entitlement does not extend to the implementation of a redundancy process.

Key takeaway for employers

It has now become routine for employees (or representatives on their behalf) to seek to derail any process that may result in dismissal under threat of an injunction, irrespective of the circumstances that underpin the relevant process. While this latest judgment of Baker J. simply affirms the position that was set out by Laffoy J. in Emo Oil, and so does not constitute a new departure, it provides a useful reminder of the limited extent to which an injunction can be availed of in the context of a redundancy process.

In short, unless an employee can demonstrate some other potential breach of contract by their employer, an application for an injunction based solely on an allegedly unfair dismissal on grounds of redundancy is unlikely to succeed.